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Transcript of press conference: Canberra: 21 June 2011: Pharmaceutical Benefits Scheme listings; Erbitux; private health insurance; podiatric surgeons

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NICOLA ROXON: Thank you for coming this morning. My name's Nicola Roxon and I'm the Health Minister and I'm delighted to be able to be here to announce that the Cabinet made a number of decisions last night that are going to be very good news for more than 400,000 patients across the country.

And that is a decision to list 13 new drugs and a number of variations to the value of more than $200 million which will provide relief in circumstances where there are not other treatments available for particular conditions, for new drugs, for those that affect bowel cancer, cystic fibrosis, MS and a whole number of other very severe diseases.

We've been working methodically through this process and, of course, it is a difficult process. And it is a process where it's a very expensive process but one that we are happily able to meet those expenses when those processes have gone through when we can see that there are not alternatives available for treatment for particular conditions.

What this means is that, as the Government announced in February, although our Cabinet has made decisions to defer a number of drugs, at that time it also listed a number of drugs. And today we are again showing that despite difficult financial circumstances, we are prepared to list drugs where they are desperately needed for patients and where there are not other good alternatives.

So this means that in just the last couple of months, over $320 million worth of drugs have been put onto the PBS and we, of course, subject the submissions for listing on the PBS that have been through PBAC have been recommended by our Advisory Committee; Cabinet still submits those applications to the same rigorous scrutiny that we put all new proposals in the Health portfolio through.

I do want to make it clear that the Government reserves its right and believes it is its role to continue to weigh priorities and direct funding to where it can do the most

good, to prevent disease, train health professionals, open more hospital beds, provide Australians with world class treatment closer to home.

And I also need to make it clear that in the future, listing innovative new drugs like Erbitux and Gilenya will become harder and harder if the Opposition continues to block sensible savings measures. It's time for the Opposition to stand up and act responsibly to recognise that savings that are captured in measures like the private health insurance proposals and the Chronic Disease Dental Scheme are essential if we are to keep Australia's health system and Pharmaceutical Benefits Scheme sustainable.

I'm happy to answer questions on any of the particular drugs or take people through any of the general issues if you've got any you want to ask?

JOURNALIST: Minister, you said some months ago that you would only be able to put new drugs onto the PBS if you got an offset in savings and where have you found those offset in $200 million worth of savings?

NICOLA ROXON: Well, I don't think those were the words. I think the words that we made very clear is that we are in difficult financial circumstances. We did fund a number of drugs at the time that those comments were made. But we didn't fund all of them that were recommended by PBAC.

On this occasion, we have recommended to us a number of drugs which we have been able to approve. Like all of the expenditure that our Government makes, it needs to be able to add up at the end of the day and that process has taken us some time to go through for the Expenditure Review Committee and Cabinet.

That process has been undertaken and, of course, we will be able to provide funding for these drugs. The important point, however, is we will not be able to keep doing that if the Opposition keeps opposing sensible savings measures like the private health insurance.

The Private Health Insurance Rebate, which is a very small change that we hope to make for high income earners, will release over $100 billion over the next 40 years which means we can use that sort of money to invest in new drugs that we don't necessarily even know are under consideration.

We need to be able to do that and this is a very important long term question, I think, for the Opposition to have to start behaving responsibly if they want these sorts of innovative drugs to be able to be funded in the future.

JOURNALIST: So can I just ask again, where did you make the savings?

NICOLA ROXON: We've gone through the processes that our Government always go through. We don't always announce it each and every time where particular savings are made. Of course, I would announce that to you if there were any cuts to health expenditure, which there have not been.

This is something that the Government is prepared to fund. We believe it's our obligation, indeed, to fund drugs where there are not other alternatives available and where they've been through this process. And I think this is a sign that we are determined to do that. We won't do it in all instances because some drugs are alternatives for others and whilst they would have benefits for some patients, it's not a situation where patients have no other alternative.

JOURNALIST: So the same as working in the Health budget or some other area of government…

NICOLA ROXON: Really, I'm not announcing today that detail. Our Government makes commitments to ensure that every bit of expenditure is balanced by savings. We announce those in the budget; we announce those in my [indistinct]; we occasionally announce those at the times that we announce expenditure.

Today, we are not doing that but this has gone through the proper processes and our Government has determined that these are commitments we need to make; that they are drugs for people suffering from MS, from cystic fibrosis, from advanced stage bowel cancer.

And they're ones that patients in Australia can rightly expect that taxpayers will help fund and that's what we will be doing from 1 September.

JOURNALIST: So some of these drugs that have been listed are the very ones that the consumer health groups were asking to be listed and pressing to be listed. Is there a connection between that? Is it purely a matter of random chance that you've made this announcement today?

NICOLA ROXON: Well, we've been making absolutely clear that we've been going through the process all along. Erbitux has been a drug for bowel cancer that has been going through a process. It's a difficult and unusual drug because it's the first drug our Government's dealt with where you actually need a genetic test to be undertaken to show whether the drug will be effective or not.

It was not one of the drugs that was deferred. It was simply going through this process. However, it's been reported as part of that mix. We've simply been able to make this decision because the company made an offer that they would pay for the drug while the funders pay for the genetic test if we listed the drug.

We have accepted that offer and I think it's a good news story for those patients but it also makes sure that the Government and taxpayers is not funding the use of that drug for people that it won't be effective on. That genetic test will be undertaken first at a cost to the company. There is still an assessment process underway for whether that will go onto Medicare into the future and the PBS from 1 September will meet the cost of the medication.

JOURNALIST: Minister, haven't you made a rod for your own back with this [indistinct] and interposing Cabinet in this process. You have an advisory committee system which is the best in the world; it seems to be one of the best in the world.

Once they've gone through this process, this drug - these drugs seem to be not only effective but cost effective, which means it is best to use them in the long run and now Cabinet's going to have to rule on these things.

Although I know that there's always been a recommendation process, now you are interposing yourself in a way that governments haven't before.

NICOLA ROXON: Well, there has always been a Cabinet process and governments of both colours have been in the fortunate financial circumstances where they have very rarely rejected those recommendations. And we also have very rarely rejected those recommendations.

But the truth is, as the Health Minister, I can't stand here and say to a bowel cancer patient that we won't fund the bowel cancer screening program to try to detect early stage cancer so that they can have it treated and have a full recovery, but I will fund a late stage bowel cancer drug that will help extend their life for three or four months when they've already suffered incredibly.

We have to get the balance right. The Government has to be able to [indistinct] something that the Advisory Committee is not asked to do, is weigh expenditure on medications against the value of expenditure on other things, even within the Health portfolio.

So we will very rarely make a decision to defer something that is recommended by PBAC but the community and particularly the Opposition need to understand that if sensible savings measures are not passed, there isn't a magic tree upon which money grows that means we can always pay for effective and even cost effective drugs if we are not able to make sensible savings as well.

This is a very difficult debate to have in the community but it is a necessary one. And what we're showing today is we're prepared to make those decisions and list drugs, even when it puts financial pressure on the budget where there are no alternatives, where they're life saving, where the treatments are absolutely necessary for patients.

But there is a long term pressure that people need to understand. And I think the Opposition has the biggest role to play in getting out of the way in blocking a whole lot of savings measures to make sure that the Budget is sustainable and we can keep funding these sorts of drugs which - there really is very wide community acceptance that people want the Government to fund.

JOURNALIST: Just on that point, you haven't even introduced into Parliament the legislation for the means test on private health insurance. When is it going to start? Is it starting on 1 July?

NICOLA ROXON: Well, it's...

JOURNALIST: When will you introduce the legislation and how long will health funds have to inform their members of this change and - if it gets through the Parliament so that they have to get the income details and adjust [indistinct]?

NICOLA ROXON: Sure. Well, obviously this information is not secret. This is legislation that has been through the Parliament twice before. The thresholds are publicly known. We will be introducing this legislation into the Parliament soon but the 1 July deadline will not be able to be achieved. We have made that public.

We will need to make an adjustment and of course the insurers will need time to be able to advise their members of it. We don't currently have indications that this legislation would be passed and obviously that is a very serious matter because it is a large saving over a long period of time with very little pain to most Australians.

And it would free up money that would allow us to provide relief through these sorts of drug listings and other health measures and is one that obviously our Government is very determined to be able to succeed with.

JOURNALIST: And you've given the cross benchers some information about the impact of these measures in their electorates. Could you tell us what those impacts will be?

NICOLA ROXON: Well look we've provided information just based on income levels. It's not a secret what the income levels are for when the rebates kick in for a number of the independents. But actually for the vast majority of members in this Parliament people on the middle and low incomes in their communities will not be in any way be affected by these changes.

A very small number of people will be affected by the changes where there is a complete drop off of the rebate and a number will be affected by an adjustment.

We think that information is useful because there's a lot of misinformation around, particularly from the insurers who last time we made some changes said that millions of Australians were going to drop out of health insurance. In fact the opposite happened and the number of people insured actually grew.

And so of course we're going to provide information to people to try to make it clear based on income levels who is likely to be affected and who is not.

We of course don't hold information about every individual person that's insured or what type of coverage they have. Individual insurers will have that information. Whether they have it broken down into regions or electorates is a matter for them.

JOURNALIST: With the use of Cabinet now involved in the PBAC system, are you opening up a system whereby it is inevitable that drug companies will lobby - there will be a new effective industry of drug companies lobbying back benchers creating political pressure because it's a political decision on [indistinct]?

NICOLA ROXON: Well Hugh you've been around for a long time. I don't think there are any suggestions that pharmaceutical companies don't currently lobby extremely hard for their drugs often before they even get to PBAC.

You know, the nature of what they're doing, exciting breakthroughs, innovative new drugs, they're going to talk to people, they're going to be proud about them, they're going to argue for them, they're going to talk to patient groups. I don't think that process has changed. But I am...

JOURNALIST: You said in the political element now is that if you don't list this the pressure goes on. Your people, your constituents will die. It becomes a much more fevered event when it becomes a political event than it is when it's going through some sober auspices of the PBAC.

NICOLA ROXON: I have absolutely total respect and confidence in PBAC. None of this is about there being any reflection on PBAC. PBAC is given a particular job to do and I believe that we do have the best system in the world where they assess effectiveness, where they rigorously assess cost effectiveness. A separate process that PBAC doesn't run rigorously negotiates a good price.

But ultimately the Cabinet is the elected government of the country. Consumers who lobby us wanting to make sure that there is better access to emergency departments or more GPs in their local area or more palliative care beds don't want to be told that

those things cannot be funded because we must in every instance no matter what list a new medication on the PBS.

So we just have to I think, calm down a bit and be realistic that the Government has be able to make some choices. We are not putting our view in place of PBAC's view. We would only in very unusual circumstances make a deferral. We've only done that for these now. There are seven drugs that are deferred.

That's a very small number when you understand that hundreds and hundreds have been listed since I've been the Health Minister worth more than $4 billion. So this is a process very much intact working and delivering benefits for patients but Cabinet is going to reserve its right to consider drugs that sometimes cost hundreds of millions of dollars and weigh that up against other expenditure that we need to think about.

JOURNALIST: This for the second time round you have not subsidised the schizophrenia drug Invega Sustenna, the pain reliever Targin and some other drugs that were not subsidised in February. Does that mean they will never get a subsidy?

NICOLA ROXON: No it doesn't. It means that we are prioritising those where there is no alternative. Now I understand for example the schizophrenia drug, there is currently a drug available as I understand it I think it's a weekly injection that's required. The new drug would be a fortnightly one, something in that order.

Yes that would be an additional benefit and certainly would assist with compliance for some patients. But it isn't a situation where there is no alternative available. For some of these other drugs like the MS drug, cystic fibrosis drug, the late stage bowel cancer drug, there are not other alternatives.

Similarly for the chronic pain drug that you've mentioned, there are a number of other drugs that patients can use for chronic pain. Of course for some particular patients one drug might work better than another but we are making choices where there are no treatments available and we don't want to stand in the way of those drugs being listed.

Similarly we don't want to stand in the way of drugs being listed that are life saving but the ones that are deferred are not in those categories. I think you were trying to ask something at the back.

JOURNALIST: Yeah Minister just a question on podiatric surgery if I could. I understand at the moment it's covered by orthopaedic surgery in terms of Medicare rebates. What are the chances of it getting its own specific Medicare rebate?

NICOLA ROXON: Look I think the chances to be honest are pretty slim. This is an area where there is quite a big professional battle where there are surgeons who argue through our system that proper qualifications are needed for people to be able to undertake surgery.

Overseas there is a different system that's recognised where podiatrists are able to get training for particular surgery. We haven't recognised that in Australia but it's mostly been an issue and still remains an issue for the professional organisations to work out who can apply proper standards. Provided they can, the Government is not going to interfere in that.

But I do think it's something where we shouldn't be making those clinical decisions and really there is quite an active debate going on in the community, particularly the community of surgeons, about whether or not this sort of specialty could be recognised.

JOURNALIST: Given the priority...

JOURNALIST: …Sorry, would it be cheaper if you did have a specific rebate for podiatric?

NICOLA ROXON: Well I don't think you ever want to make something cheaper if you're going to compromise quality. So you've always got to get the balance right to make sure if you are looking for a cheaper alternative, which our Government has been very prepared to do, in the situations where we're confident that nurse practitioners, for example, can undertake certain roles that used to only be undertaken by doctors or where midwives can undertake certain roles that have been undertaken by obstetricians.

And although there's been a little bit of an argument over that, I think there's been broad acceptance because the evidence base is clear. I think in this situation and I'm happy to sort of take it on notice and get more information, but from my knowledge to date it's really an area where there isn't clear agreement that proper quality standards and professional training would be met. And obviously in those circumstances we wouldn't consider making any changes.

JOURNALIST: Given the importance you put on the private health insurance rebate matter, there is a week of Parliament that's coming up with the new Senate. Is that an opportunity you're going to use to get that on?

NICOLA ROXON: Well look we'll be introducing the legislation soon. I don't think I can make any further announcements about that. We - the 1 July date will not be able to be met, even if the legislation were passed by some miracle today in the house and in the Senate it wouldn't be sufficient time for the insurers to notify their members.

So I don't think they need a huge amount of time when we deal with the notifications that are needed for price changes - it's usually a month or two. This is obviously known. It's something where both the insurers and those dealing in the tax industry need to be aware of the changes. We'll be making that information available shortly.

JOURNALIST: Do you know how many people will have to pay a higher premium as a result of these changes?

NICOLA ROXON: Which changes?

JOURNALIST: The means test on private health insurance.

NICOLA ROXON: I don't believe anybody will be required to pay a higher premium as a result of these changes.

JOURNALIST: Well [indistinct] 30 per cent rebate then they'll be getting a 10 per cent rebate...

NICOLA ROXON: I beg your pardon, I thought you meant an increase in the actual premiums and the insurers putting up their prices, which I don't believe would be an appropriate response to this. Yes we do have those figures. I don't have them in front of me. It's in the order of hundreds of thousands who would have some adjustment because it's a scaled proposal.

So the vast overwhelming majority of the community - middle income and low income - more than eight million Australians will have absolutely no effect from this change. A number will be affected by the reduction from 30 to 20 to 10. A very small number would receive no rebate. They're the highest income earning Australians - couples earning over more than a quarter of a million dollars. But we can provide you with those figures.

Of course people move in and out of income groups. People move in and out of insurance and our projections are that a very small number of people will decide to move out of insurance because of this. And it's why we're confident that this is a sensible targeted measure that should be supported by the Parliament and particularly by the Opposition.

Okay thanks very much.